The opinion of the court was delivered by: GRIM
Plaintiff brings this diversity action against her former husband for an accounting of the profits of business enterprises in which she and her then husband jointly were engaged and in which she claims an interest. Defendant has filed an answer and has moved for summary judgment based upon two contentions (1) that plaintiff has executed a release which relieves him of all liability in this action and (2) that plaintiff's action is barred by the statute of limitations or by laches.
Shortly before they were divorced, the parties executed a property settlement agreement. The property they owned included not only property and property rights of the types which married couples usually own and which are usually dealt with in property settlement agreements attendant on divorce, but other types of property rights as well.
The first problem which this case presents is whether by a release incorporated in the property settlement, the wife released her rights in the business enterprises in which she and the husband had been engaged during coverture, and the property which had been acquired thereby.
Following a paragraph containing the wife's release of claims for maintenance, support, and alimony, the property settlement agreement continues:
'6. Each of the parties hereto hereby specifically waives and renounces all right to share in the estate of the other, and waives and releases any and all claims of any kind or nature (whether of dower, curtesy, right of survivorship, community, or otherwise) to any part of the property and estate of the other, both during the other's lifetime and after his or her death.'
In short, the parties intended to settle all their common property rights and go their separate ways. This conclusion gains support from the preamble to the agreement, which states explicitly that the parties have agreed on a settlement of property rights and 'upon a discharge of their obligations each to the other.'
Because of its broad scope, the release is broad enough to bar the claims asserted by the wife in the present action.
The wife contends, however, that the agreement incorporating the release is not valid because at the time she executed it she was not mentally competent. The husband disputes this, contending that this issue of fact was litigated and resolved in a prior proceeding between the parties and that not only was the issue resolved in the prior proceeding, but that the determination there made of the issue is res judicata and no longer open to dispute or litigation between the parties. The wife does not agree.
The prior proceeding to which the husband refers was in the Orphans' Court of Cambria County, Pennsylvania, on an account
in an estate created by a deed of trust executed by the husband and wife contemporaneously with and in pursuance of the above mentioned property settlement agreement, and shortly prior to the divorce proceedings between the parties.
The wife was the principal beneficiary of the trust, which had for its main object her support and maintenance. Both she and the husband contributed assets to the trust.
In the Orphans' Court proceeding the wife filed a petition in 1960 for rescission of the deed of trust and for the award to her of the principal of the trust. In that proceeding the wife appeared, by counsel, as petitioner, and the husband, together with the substituted trustee, and a remainderman (the daughter of the parties) appeared as respondents. The problem presented by this petition to rescind the deed of trust was before the Orphans' Court at the same time as was the audit of the trustee's account.
The wife's contention before the Orphans' Court and the basic issue before it (as it is the basic issue in the case at bar) was that at the time she executed the property settlement agreement and deed of trust she was mentally incompetent. After a trial lasting six days, the Orphans' Court determined that, although the wife was incompetent at times both before and after the execution of the settlement agreement and deed of trust, she executed them both during a lucid interval, that she was mentally competent when she executed them, and that consequently both instruments were valid. The Orphans' Court also determined that she had been mentally competent since at least May 23, 1955. The decision of the Cambria County Orphans' Court was affirmed by the Pennsylvania Supreme Court on March 21, 1963, In re Meyers (Girsh Trust), 410 Pa. 455, 189 A.2d 852 (1963). Petition for Reargument denied, April 30, 1963.
The Orphans' Court determined that it had jurisdiction over the trust. That determination was not contested in the Orphans' Court in the Pennsylvania Supreme Court or in this court.